Ford has its worst collapse in 15 months after rallying 20%. It's even been called a meme stock
Ford shares fall nearly 8% after 'meme' rally / Photo: Ford
Quotes of the Ford Motor Company collapsed by 7.5% after a rapid rise in the previous two days, when investors bet on the expected benefits of the company from the boom in infrastructure for AI.
The auto giant's shares fell 7.5% in trading on May 15, showing the worst performance since February 2025, Bloomberg calculated. At the same time, the shares still remain almost 12% above Tuesday's closing level.
Investors started buying up heavily on Wednesday after Morgan Stanley highlighted Ford's new energy storage business and possible future partnerships with hyperscalers. The investment bank analyst expects that this area could benefit from growing demand from data centers. As a result, the company's market capitalization jumped 21% in two days.
However, investor appetite for risk waned on Friday, with the S&P 500 index falling 1.2% and Ford performing worst among its peers. General Motors shares fell by 3.7% and Stellantis by 4.5%.
Is this a new meme campaign?
"Investor positioning and technical factors may dominate for short periods of time, but the sustainability of the [stock's] move is still determined by fundamentals," Ivan Feinseth, chief investment officer at Tigress Financial Partners, told Bloomberg. He urged market participants to be cautious, noting that "the key driver for Ford is still auto sales," and such "meme rallies" are often quickly followed by equally sharp corrections(quote on Investing).
Barclays analyst Dan Levy also believes that Ford has shown the ability to "occasionally become the object of meme hype in the market," writes CNBC. "Although at first glance this movement is hard to call completely rational - Ford still has a lot to prove - in the context of the boom around AI and data centers, such a reaction looks logical," he said. The analyst called the prospects for the auto giant's energy storage business "attractive," but Tesla remains the dominant player.
In recent months, investors have been actively looking for companies that can capitalize on the rapid growth in energy consumption due to the development of AI. Because of this, their shares are beginning to be perceived by the market as fast-growing technology securities, notes Bloomberg. But such excitement makes the securities vulnerable to sharp fluctuations in sentiment, the agency warns.
This article was AI-translated and verified by a human editor
